The use-case of an attached keyboard and the fully fledged Office app suite is not what this device is primarly for.
That may be true, but it's a poor excuse. The basic function of a word processor is to easily generate formatted text, historically primarily for printing on letter-type paper, but that's maybe a bit less important today than it once was. Minimal functionality for a word processor is being able to render that text as fast as a human user can type it.
WYSIWYG word processors had this capability well over 20 years ago on CPUs far inferior to a quad-core Cortex A9 with a thousand times[0] less RAM. For a major software company to fail at this in 2012 is inexcusable. If Tesla's new sedan had a top speed of 50 MPH, prospective buyers would say it's not ready no matter how cool its other characteristics are.
Of course, it is a preview edition of Word. Maybe the finished version will have acceptable performance. Until then, "it isn't done" is the only reasonable conclusion. Regardless of any other features, Microsoft has not provided the minimum viable product for a word processor.
[0] Note: not hyperbole. Two megabytes versus two gigabytes.